Will Crowdfunding Drive a New Wave of Startup Investing?

Venture capital investing has traditionally been the domain of the wealthy, but that could change with the passage of new legislation that will allow entrepreneurs to raise money from a much broader swath of the public — and give ordinary investors the chance to own a piece of the next Google, Facebook, or Twitter. Tucked [...]

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WASHINGTON (AP) — A new form of crowdfunding is coming soon that will allow startups to raise money by selling stock to Main Street investors.The Securities and Exchange Commission on Friday adopted rules implementing a 2012 law that opened the door to securities crowdfunding. The vote was 3-1 at a public meeting.For years, artists, charities and entrepreneurs have used the power of the Internet to generate money for projects. Now starting in mid-2016, businesses will be able to offer investors a piece of their company by legally selling stock online.

Buying a stake in a rental building shouldn’t be more worrisome for a securities regulator than say, investing in a tech start-up, says Craig Asano.
But the executive director of the National Crowdfunding Association of Canada says provincial securities commissions are currently planning to exclude the “tried and true asset class” of real estate from using equity crowdfunding to raise money online and through other electronic means.
“It’s an area of growth,” he said. “We believe at the association that it shouldn’t be excluded.”

Venture capital risktaking and burn rates on cash are at levels that exceed the technology bubble in 1999. Companies that haven't made a dime, and perhaps never will, have valuations of $10 billion more.Curiously, it' venture capitalist Bill Gurley who Sounds Alarm on Startup Investing in an interview with the Wall Street Journal.

Do you have an idea for a startup, but no product, traction, or even a working prototype? That's OK! You could still get up to $500,000 from a new wave of venture capitalists — "pre-seed investors" — who are happy to fund your future business endeavor.

Klaus Hommels, one of Europe’s most prominent venture capitalists, has invested €1 million (£720,000) in a German technology hub called "Factory Berlin," which counts SoundCloud, Twitter and Uber among its tenants. He has also joined the board.

When Tanuj Mendiratta hit the road in December to raise money for his mobile marketing firm Appiterate, he found not many venture capital funds were keen on investing in business-to-business startups such as his. He needn't have worried. The company's product, already being used by online marketplaces such as Snapdeal, drew a lot of interest from Indian internet companies looking to beef up their mobile applications. Mendiratta got one term-sheet from a VC fund, and buyout offers from two of India's largest online retailers.

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